2021 Colorado legislature’s new taxes bypass TABOR by Kevin Lundberg
Taxes and TABOR
As a part of my deeper dive into the 2021 bills that are now law, this week’s bills affecting taxes and TABOR are examined. In general, the bills which passed this year increased taxes and established new enterprises without calling for any constitutionally required votes from the people of Colorado.
This is far too predictable for the majority party. They use every trick in their playbook to wiggle around the clear intent of TABOR to require the people to vote on these significant new burdens on all citizens of Colorado.
However, there was one small bright spot I found. SB-227 created the State Emergency Reserve Cash Fund, finally putting actual cash into the TABOR-required emergency fund. Since TABOR was created, nearly thirty years ago, the TABOR emergency reserve has been essentially ignored. Instead of actually setting aside cash as a reserve the legislature creatively designated assets, such as buildings as the “reserve” for emergencies. Finally, in this year, when the state coffers are full of federal debt dollars, they found some money to actually make a viable fund.
But the rest of the laws headed in the opposite direction
HB-1311 is simply titled “Income Tax.” A more accurate title would be raising income taxes without a vote of the people. This lengthy bill changes Colorado law to disallow many tax deductions that are a part of the federal income tax system. In some ways, this bill negates federal income tax reductions implemented under President Trump. Bottom line: tens of millions in new tax revenue, without a TABOR vote.
In fairness to the bill overall, some tax credits were also created or expanded, but many were targeted to influence certain actions, creating winners and losers. Again, typical government manipulation of the private sector.
HJR-006 removed Colorado’s call for a Constitutional amendment to force Congress to balance its budget.
HB-1325 creates an interim committee to study the school finance formula and implement significant changes. I smell higher property taxes to start with. I also found this curious authorization within the bill (now law).
“THE INTERIM COMMITTEE SHALL USE NINETY MILLION DOLLARS FROM THE STATE EDUCATION FUND, CREATED IN SECTION 17 OF ARTICLE IX OF THE STATE CONSTITUTION, AS NECESSARY, FOR THE IMPLEMENTATION OF SCHOOL FINANCE FORMULA CHANGES.”
$90,000,000 to implement their plan? This preauthorization of such magnitude is more than a little excessive. It is also curious that they already have a specific number in mind. It sounds like the plan may already be in place. They might just be waiting for a legal way to pull the trigger. In any event, I still smell a lot more taxes coming out of this one.
SB-205 is the main budget bill, the Long Bill, which increased the general fund by over 21% for this current fiscal year (2021-22). What? A 21% increase in one year? As I said before, the state coffers are full of federal debt dollars. Having served for two years on the Joint Budget Committee I can tell you that this kind of budget growth is way out of control and cannot be sustained in future years.
SB-260 is a radical transportation plan that is aimed at getting you out of your car and into a bus or train. It raises billions in new taxes (fees) that ignore TABOR’s required vote of approval from the people, They also pulled a legal stunt on the new constitutional requirement for a vote of the people for new enterprises that raise over $100 million over five years.
Instead, they broke them into several new enterprises, all fitting neatly below the $100,000,000 mark. They are the Community Access Enterprise, the Clean Fleet Enterprise, the Clean Transit Enterprise, and the Nonattainment Area Air Pollution Mitigation Enterprise.
SB-260 also adds new taxes to gas at the pump, Uber rides, deliveries, etc. This is the proverbial tax anything that moves law.